Bolivia at a Crossroads

Many countries in South America are leaning to the left, although there are important differences between the governments. Brazil’s government is the political expression of the workers; Venezuela’s is a popular movement supported by the military; Argentina’s represents a renewal of the peronist movement; and, Chile’s reflects a more Western European style of socialism, deeply rooted in democracy.

With respect to Bolivia, where indigenous people comprise more than half of the population, the government embodies the indigenous movement. Upcoming elections in Peru, Ecuador and Mexico could follow this trend.

What Happened in Bolivia?

The crisis in Bolivia resulted from the imposition of a traditional political system arising from unsolved social and economic problems. In Bolivia, as in many Latin American countries, poverty, unemployment and inequality are the main weaknesses of the prevailing political order. At the beginning of the 1980s, many people in the ruling class understood—at least intellectually—that something was deeply wrong with the social fabric of the nation, and immediate action was necessary.

As a result, Bolivia launched a democratic transformation that included social, economic and land reforms, improvements in education and popular participation. As the political system was opening itself to include indigenous people, the new actors were becoming more aware of their own power. An avalanche of economic, social, cultural and political expectations arose from all of the new social actors.

Unfortunately, the bill was far too expensive for a government that was facing a recession. At the end of the 1990s and the beginning of the 2000s, strong external shocks caused an erosion of previous gains.

Many of these reforms have yielded satisfactory results and have strongly contributed to the modernization of the Bolivian economy. However, some, such as pension reform and the program to eradicate coca, have been the cause of several problems that confront Bolivia today.

In addition, after five years of economic crisis, institutional, fiscal and financial problems persist, and unemployment has climbed dramatically, making the poorest sectors even more vulnerable.

What Can We Expect from the New Government?

No one predicted the magnitude of the victory of Evo Morales, an Aymra Indian, who is the leader of the Movement Towards Socialism (MAS) and the longtime head of the coca growers union in El Chapare.

No doubt, it is a real revolution: new leadership, new people. Bolivia’s indigenous people are now in charge of their own destiny. However, it is also a return to the past, to old ideas and to economic policies that failed more than four decades ago.

Although it is too soon to speculate about the new administration’s policies, it is appropriate to analyze some of the ideas that President Morales and Vice President García Linera have expressed publicly in recent months. “I want to say to you, my Indian brothers, that the 500-year campaign of resistance has not been in vain,” Mr. Morales said moments after being sworn in. He continued, “This democratic, cultural fight is part of the fight of our ancestors, it is the [continuation] of the fight of Che Guevara.” This mix of Marxism and indigenous vindications will likely be the driving force of the new government’s policies.

According to Vice President Álvaro García Linera, what happened in Bolivia may extend beyond our borders, potentially having an impact on Ecuador, Guatemala, Mexico, and to a lesser degree Peru—places with powerful indigenous movements. He believes that Bolivia has “achieved a new social pact, where the power is now in the hands of new political actors, a new hegemonic group, (Gramsci) the indigenous peoples, who were able to articulate a political agenda around Evo Morales,” not through a violent revolution but through the vote. “We are confronting a political, economic and cultural revolution,” he said. He added, “This is a process that started with the recent elections, but will continue with the Constitutional Assembly.” In that context, the Constitutional Assembly will be the instrument of change vis-à-vis the Bolivian State.

Opportunities

Bolivia’s new government has the best opportunity in the country’s recent democratic history to solve some of the structural problems that affect a very fragmented Bolivian society. A real revolution happened in Bolivia within the rules of democracy. That is a great achievement. Bolivian citizens, not only the indigenous people, decided to give Mr. Morales a chance. They clearly said with their vote, “We are giving you an opportunity, Mr. President, to solve our problems. You have control over the Congress, the streets and the social movements; you are receiving a strong mandate, a healthy economy and a weak opposition. You can transform the country for good.”

The people voted in favor of change, and while the government respects the rules of the game, we have to respect the will of the people, trusting that the new actors will develop a democratic behavior within the framework of an effective system of checks and balances, an effective balance of powers, free press, freedom of speech and the rule of law. Unlike his predecessors, Mr. Morales assumes the presidency with overwhelming good will from inside Bolivia and beyond. The economy is strong, having grown at a rate of four percent in 2005, the best mark in years. In December, the International Monetary Fund wrote off the country’s $231 million debt, and the deficit has shrunk significantly, thanks to higher tax revenues and spending constraints. President Morales takes the helm of a country that is in very good shape—politically (control of Congress), economically and financially. Bolivia today has the biggest unexploited gas reserves in the hemisphere.

What Could Go Wrong in Bolivia?

Political analysts say that a sound economic picture coupled with the mandate that propelled Mr. Morales to power should give his government time to maneuver. Still, he has to keep in mind that some of his supporters are expecting a complete and radical change. How he manages that support is the question. Further, how he combines his good causes with good policies to solve the fundamental problems of poverty, unemployment and corruption, to promote equal opportunity, institution building and the rule of law, to enhance trade and attract investment and to advance good macroeconomic policies, fiscal respon­sibility and efficient and competent management of the country is also important.

That is what is at stake in the coming months. Good causes with the wrong policies could be a very bad combination for any country. That is true for issues like the fight against illegal drugs, trade, cooperation, environment/hydrocarbons and investments.

As Francis Bacon said, “Hope is a good breakfast, but it is a bad supper.” In Bolivia, we are still at breakfast so we must sustain hope.